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Minimum wage increase impacts staffing for southern Arizona school districts

Published: Sep. 2, 2021 at 1:00 PM MST|Updated: Sep. 2, 2021 at 3:20 PM MST
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TUCSON, Ariz. (KOLD News 13) - It’s a looming issue for school districts: the rising minimum wage.

Education leaders say a hike could put a fiscal squeeze on schools. But at least one local district has a solution at least for now.

“This is a challenge being faced by school districts and I think employers all over the state of Arizona,” said Hector Encinas, Sunnyside’s CFO.

He’s in charge of the district’s pandemic relief funds totaling $80 million.

The district is now bracing for another minimum wage hike.

Encinas explains it’s just over $12 right now and three years ago it hovered around $8.

“It’s scheduled to increase this coming January, depending on whatever inflation is,” he said.

The hike impacts the classified hourly employees who keep schools running, such as office workers, custodians, groundskeepers, crossing guards, security monitors, cafeteria workers, substitute teachers.

Encinas has a ballpark figure of how much minimum wage will jump.

“The word we have right now is that the inflation for this past year is going to be close to 5%. So what it means is that $12.15 is going up to $12.81 an hour in January,” he said.

Sunnyside district estimates how much the wage hike will cost.
Sunnyside district estimates how much the wage hike will cost.(KOLD)

The projected cost is $570,000.

But, Encinas explained, a hike has a domino effect.

It doesn’t just impact those sitting at the starting pay level.

He said the district is also dealing with a “compression” problem. Compression pay is when employees who have been in a job for a long time makes less than or near new hires in the same position.

“Say the beginning salary was $8 an hour for the current officer assistant who’s been with us for 8 years making $13.50 an hour. When you jump minimum wage to $12.15, brand new hire, and you have an 8 year employee making $13.50 an hour -- the compression,” he said, “So we addressed the compression issue with ESSER monies.”

Sunnyside district is using ESSER funds to pay wage compression.
Sunnyside district is using ESSER funds to pay wage compression.(KOLD)

Encinas estimates the the total compression cost to be $2.7 million dollars.

But ESSER funds will run out in three years and the new minimum wage will remain.

“So we have three years to sustain that cost,” he said.

Both Sunnyside and TUSD received the lion’s share of the federal relief funds in our region.

We’ve reported they’re ESSER funds to increase salaries and hire more certified workers, such as teachers and specialists,

Both districts are still trying to figure out how to avoid diving off a steep financial cliff when the ESSER dollars run out.

KOLD Chief Investigative Reporter Valerie Cavazos has been reporting on how our districts are spending their share of the federal relief dollars, known as ESSER funds.

Copyright 2021 KOLD News 13. All rights reserved.